Case 1:24-cv-00018-JLH Document 42 Filed 02/06/25 Page 1 of 3 PageID #: 148
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 24-18-JLH
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`VANDA PHARMACEUTICALS INC.,
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`Plaintiff,
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`v.
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`TEVA PHARMACEUTICALS USA,
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`INC.,
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`Defendant.
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`____________________________________)
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`MEMORANDUM ORDER
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`At Wilmington, this 6th day of February 2025, having reviewed Defendant’s Motion to
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`Dismiss for Failure to State a Claim (D.I. 33) and the accompanying briefs (D.I. 34, 38, 40), and
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`having considered the applicable law;
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`IT IS HEREBY ORDERED that Defendant’s Motion (D.I. 33) is DENIED for the
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`following reasons:
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`1.
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`Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(6). “To
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`survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,
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`to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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`(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its face
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`when the complaint contains “factual content that allows the court to draw the reasonable inference
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`that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). A
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`possibility of relief is not enough. Id. “Where a complaint pleads facts that are ‘merely consistent
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`with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of
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`entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557). In determining the sufficiency of
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`Case 1:24-cv-00018-JLH Document 42 Filed 02/06/25 Page 2 of 3 PageID #: 149
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`the complaint, the court must assume all “well-pleaded facts” are true but need not assume the
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`truth of legal conclusions. Id. at 679.
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`2.
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`To state a claim for false advertising under Section 43(a) of the Lanham Act, 15
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`U.S.C. § 1125(a), the complaint must plausibly plead
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`(1) that the defendant has made false or misleading statements as to his own product
`[or another’s]; (2) that there is actual deception or at least a tendency to deceive a
`substantial portion of the intended audience; (3) that the deception is material in
`that it is likely to influence purchasing decisions; (4) that the advertised goods
`traveled in interstate commerce; and (5) that there is a likelihood of injury to the
`plaintiff in terms of declining sales, loss of good will, etc.
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`Novartis Consumer Health, Inc. v. Johnson & Johnson–Merck Consumer Pharm. Co., 290 F.3d
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`578, 590 (3d Cir. 2002) (quoting Johnson & Johnson–Merck Consumer Pharm. Co. v. Rhone–
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`Poulenc Rorer Pharms., Inc., 19 F.3d 125, 129 (3d Cir.1994)) (alteration in original).
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`3.
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`Defendant argues that the Complaint fails to adequately allege a false or misleading
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`statement. I disagree. The Complaint identifies the precise statements that are alleged to be false
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`and misleading and explains Plaintiff’s theory as to why the statements are false and misleading.
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`(See, e.g., D.I. 1 ¶¶ 79–81 (alleging that Defendant advertises its product as a “brand equivalent”
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`to “HETLIOZ® capsules,” which is false and misleading because Defendant’s product is not
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`approved for all of HETLIOZ®’s indications and a reasonable consumer would understand “brand
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`equivalent” to mean that HETLIOZ® and Defendant’s product are interchangeable).) The
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`allegations, taken together and viewed in the light most favorable to Plaintiff, plausibly plead at
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`least one false or misleading statement.
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`4.
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`The Court also rejects Defendant’s argument that the Complaint fails to sufficiently
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`allege materiality and/or a tendency to deceive. The Complaint alleges that Defendant’s
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`statements have caused sales to be diverted from Plaintiff to Defendant. The Complaint also
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`alleges that consumers were deceived, and it explains why the statements have a tendency to
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`Case 1:24-cv-00018-JLH Document 42 Filed 02/06/25 Page 3 of 3 PageID #: 150
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`deceive. Defendant may well be right that Plaintiff will ultimately be unable to prove its case. But
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`Plaintiff has pleaded a plausible false advertising claim, which is all it has to do at this stage.
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`IT IS FURTHER ORDERED that, within 30 days, the parties shall jointly prepare and file
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`the following: (i) a proposed Scheduling Order and (ii) a letter, not to exceed three pages, setting
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`forth (a) the parties’ positions regarding any disputes in the proposed Scheduling Order; and (b)
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`a list of any other issues the parties want to address at the Rule 16 Scheduling Conference. An in-
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`person Rule 16 Scheduling Conference shall be held on March 28, 2025, at 10 a.m. in Courtroom
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`6D.
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`________________________________
`The Honorable Jennifer L. Hall
`UNITED STATED DISTRICT JUDGE
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`3
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